A "Stockout" Occurs When

question 141

Multiple Choice

A "stockout" occurs when

• A) brokers run out of shares of stock to sell of a particular company.
• B) a disruption due to a power outage, etc., causes a temporary production shutdown.
• C) a company holds too many goods in inventories.
• D) a firm loses sales because goods consumers want are not available.

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Definitions:

Current Price

The present value or selling price of an asset, security, or commodity available in the marketplace.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Strike Price

The predetermined price at which the buyer of a call option can purchase the underlying asset, or the buyer of a put option can sell the underlying asset.

Pre-Tax Net Profit

The amount of revenue left after deducting all operational, interest, and depreciation expenses, but before paying income taxes.